One of my readers just sent me a note linking to a source that reports the IRS will be issuing (or has already issued) new withholding tables to pension plans. The revised withholding tables correct for the "Making Work Pay" credit for which retirees are not entitled, but which have been getting since April 1. I will provide a link in an update to this post since I have to run off now. It isn't at all clear when PERS will adopt these - June 1 - is the obvious date, but perhaps they won't do it until the COLA adjustment is made on the check to be received on August 1. When I update, I hope to have PERS' answer by then. In the meantime, this should help retirees plan more easily for the unanticipated and undeserved (at least according to the IRS and Congress) windfall. Update: the link to the article and a link to the IRS web site can be found here. Update #2: I just heard back from PERS. The "new tables" are not new withholding tables per se but include a supplemental withholding table that helps to get retirees back to near parity. PERS is studying the various options given by the IRS and will post an announcement once they have determined whether the cost of implementing the change versus the benefits gained are actually worthwhile. It is, by no means, a certainty that PERS will adopt these supplemental tables. Stay tuned for more information as it becomes available. In the meantime, you can adjust your withholding to offset the gains from the tax break if you want by filling out a new W-4P. And here you thought retirement would be a bowl of cherries.
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